Why Centene's Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of specialty health-care company Centene (NYS: CNC) were flying high today, gaining as much as 11% intraday trading.
So what: Centene and Molina Healthcare (NYS: MOH) were both on the receiving end of some good news from the state of Ohio. After neither was initially among the five health-care plans selected to serve Medicaid members in the state, they filed a formal protest. Today, the Ohio Department of Job and Family Services announced that Centene's Buckeye Community Health Plan and Molina's Healthcare of Ohio both will get contracts. This move wasn't without losers elsewhere, as Aetna's (NYS: AET) Better Health and Meridian Health Plan ended up not getting contracts.
Now what: The math is pretty easy here -- it looked as if Centene may have been out in Ohio and now it's back in. So that's obviously good news.
But could there be even more upside for the stock? On April 5, the day before the original Ohio decision, the stock was trading at more than $50. As of the time of this writing, the stock is under $36. The market overall has performed poorly during that period as well, which undoubtedly accounts for some of Centene's drop, but could the disappearance of the Ohio overhang be a tailwind in the weeks ahead?
Want to keep up to date on these stocks?
At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.